HMRC's accelerator pedal
HMRC now has the power to demand payment of disputed amounts of tax without having to prove the tax is actually due. It does this by issuing an Accelerated Payment Notice where either:
- the taxpayer has used a tax scheme which has been disclosed as a tax avoidance scheme; or
- a similar tax scheme to the one the taxpayer used has been ruled to be ineffective by a final Court judgment and HMRC has issued a Follower Notice; or
- HMRC believe the tax arrangements used by the taxpayer are abusive and has issued a notice under the General Anti-Abuse Rule.
In addition the taxpayer’s tax return or tax claim concerning the disputed tax must be under enquiry, or else there is an appeal in progress regarding the disputed tax.
If you receive an Accelerated Payment Notice you can’t appeal against it. You have little option but to pay up, but we need to discuss the following first:
- Can you afford to pay? – We may need to ask HMRC for a time-to-pay arrangement.
- Is the calculation of the tax due correct? – If not, we need to challenge this within 90 days.
- Do you want to settle the dispute with HMRC? – There may be penalties and interest charges to pay on top of the tax demanded.
Agreeing tax settlements and dealing with demands following failed tax schemes is a specialist area, so please ask our tax investigation experts for advice before plunging in.
